W. F. LLOYD AND SOCIALISM: A NOTE

GEOFFREY GILBERT

Hobart and Will iam Smith Colleges

The history of economic thought recognizes William Forster Lloyd, Drummond Professor of Political Economy at Oxford University from 1832 to 1837, chiefly for his technical accomplishment in having developed a n early version of the marginal theory of value.’ But in recent years Barry Gordon and Richard Romano have drawn attention to other aspects of Lloyd’s thought, in particular, to his treatment of poverty as a feature of the advancing capitalist economy and the role of the state in its alleviation. Gordon (1966) has depicted Lloyd as a “forerunner of the Marxian critique of . . . laissez-faire capitalism” (p. 64). H e bases this contention on passages in Lloyd’s published lectures pointing to a tendency toward increasing class division, wage dependence in the working class, and capitalist exploitation of labourers. Romano (197 1) disputes Gordon’s reading of Lloyd as a proto-socialist, arguing that Lloyd should be seen rather as “an advocate of regulated capitalism” (p. 285; see also Romano, 1977, p. 427). Citing the considerable attention given by Lloyd to poor laws - eight of his twelve published lectures dealt with that subject - Romano argues persuasively that Lloyd’s real concern was to demonstrate the necessity and “justice” of a poor-law system in a n industrializing economy such as that of contem- porary England.

The purpose of this note is to cite some additional evidence that the bent of Lloyd’s thought was indeed non-socialist. Both Gordon and Romano pass overa section of Lloyd’s first lecture on population in which he raises serious questions concerning the operation of “systems of equality” (Lloyd, 1837, pp. 17-23). In British social thought of the late eighteenth and early nineteenth centuries, “systems of equality” were the intellectual prototype of what, from the 1830s on, came to be called “socialism” or, in Marx’s scornful usage, “utopian socialism”. Featuring “a community of labour and of goods” (Lloyd, 1837, p. 17) , systems of equality were advocated by such diverse thinkers as William Godwin, Thomas Spence, and Robert Owen.’

Lloyd presents his critique of systems of equality in the course of a larger discussion of the Malthusian prudential check to population. Claims Lloyd: “ I d o not profess t o be here considering generally the merits of systems of cquality, and, therefore, I shall not stop to inquire, whether any, and what substitute, for the motive of private interest, can be

, ’ See Lloyd’s 1834 Lecture on the Nofiorr ol Value . . ., republished in Lloyd (1837). The secondary literature on Lloyd and utility theory includes Seligman (1903), Bowley ( 1972),and Romano (1977).

’ Arguably the most powerful of these ”cqualitarian” theorists was William Godwin, whose views T. R. Malthus aimed to refute in the 1798 Essay ori Populalioii. Still among the most pcnetrating analyses of Godwin’s thought is that in Halcvy (1928).

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1986 W. F. LLOYD A N D SOCIALISM 145

suggested, to stimulate exertion, to prevent waste, and to check the undue increase of population” (p. 23). What this disclaimer in fact provides is a synopsis of l loyd’s three main grounds of objection to systems of equality: (a) the lack of work incentives, (b) the systematic waste of resources, and (c) the built-in tendency toward overpopulation.

The problem of work incentives in a system of coopcrative labour and communal property is stated as follows:

Suppose the case of two persons agreeing to labour jointly, and that the result of their labour is to be common property. Then, were either of them, at any time, to increase his exertions beyond their previous amount, only half of the resulting benefit would fall to his share; were he to relax them, he would bear only halfthe loss. If, therefore, we may estimate the motives for exertion by the magnitude of the personal consequences expected by each individual, these motives would in this case have only half the force. which they would have, were each labouring separately for his own individual benefit. Similarly, in the case of three partners, they would have only one third of the force - in the case of four, only one fourth - and in a multitude, no force whatever. For beyond a certain point of minuteness, the interest would be so small as to elude perception, and would obtain no hold whatever on the human mind.

The general conclusion drawn by Lloyd is that in a system where material rewards are not proportioned to individual effort, “each person will view the future consequences expected to result from an increase or relaxation of his own exertions in the same light as he would any other benefit or injury extending indifferently to the whole community” (pp. 18-19).

The second objection to systems of equality - that common resource ownership will likely lead to waste - Lloyd illustratess with another simple example:

. . . Suppose two persons to have a common purse, to which cach may freely resort. The ordinary source of motives for cconomy is a foresight of the diminution in the means of future enjoyment depending on each act of present expenditure. I f a man takes a guinca out of his own purse, the remainder, which he can spend afterwards, is diminished by a guinea. But not so, i f he takes it from a fund, to which he and another have a n equal right of access. The loss falling upon both, he spends a guinea with as little consideration as he would use in spending half a guinea, were the fund divided. Each determines his expenditure as if the whole of the joint stock were his own. Consequently, in a multitude of partners, where the diminution effected by each separate act of expenditure is insensible, the motive for economy entirely vanishes.

Again Lloyd stresses the general principle involved, that “the future is struck out of the reckoning, when the constitution of society is such as to diffuse the effects of individual acts throughout the community at large” (pp. 19-20).

The final objection to systems of cquality is the familiar Malthusian argument of their tendency to overpopulation:

Marriage is a present good. The difficulties attending the maintenance of a family are future. But i n a community of goods, whcre the children are maintained at public tables, or where each family takes according to its

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necessities out of the common stock, these difficulties are removed from the individual. They spread themselves, and overflow the whole surface of society, and press equally on every part. All may determine their conduct by the conside- ration of the present only. All are a t liberty to follow the bent of their inclinations in an early marriage.

Because individuals in a system of equality bear virtually none of the consequences of their own decisions with regard to marriage and procreation, the motive of moral restraint is simply absent from the equalitarian setting. Population tends to rise and the share of food allotted to each individual diminishes to the point of “extreme distress”. Further population growth must now be repressed by “the undisguised check of misery and want” (pp. 21-22).

In his masterful 1952 survey of the classical economic attitude toward socialism - still the authoritative discussion of the subject - Lionel Robbins was silent on the contributions of Lloyd. It is not easy to understand why. He gives considerable attention to Malthus’ treatment of systems of equality, especially the overpopulation argument presented so forcefully in the 1798 Essay on Population. But Malthus had little to say on the problem of work incentives in the equalitarian society beyond the rather vague formulation that such a society would lack “those stimulants to exertion which can alone overcome the natural indolence of man” (Malthus, 1872, vol. 11, p. 25). And he had nothing a t all to say on the probable waste of resources in a regime of common property. Lloyd’s critique of systems of equality is therefore logically more complete than that of Malthus. It has the added merit of suggesting a unified approach to the multiple risks a society would encounter were it to organize itself in a way that fully socialized the costs or consequences of individual decision-making. Though concise and abstract, Lloyd’s analysis of the equalitarian system leaves little doubt where he would have stood on any proposal to abandon capitalism in favour of socialism.

RI:FERENCES

Bowley. M. (1972), “The Predecessors ol’ levons -The Revolution That Wasn’t”, Manchesfer School. vol. 40.

Gordon. B. (1966). “W. F. Lloyd - A Neglected Contribution”. Oxford Ecortomic Papers. n. s . , vol. 18.

Halevy, E. (1928), The Groujth of Philosophic Radicalism, tr. M. Morris (London: Faber and Faber).

Lloyd. W. F. (1837). I.ecIures 011 Popitlafiori. Value. Poor-Lauis and Reill (London: Roalte and Varty). reprinted in 1968 (New Yorlc: Augustus M. Kelley).

Ma1thus.T. R. (1872),A11Essayor?tlzePri/zcipleofPopulatiorz. 7thcd. (London: J. Johnson),reprinted in 1973 (London: 1. M. Dent and Sons) .

Robbins. L. (1952). The Theonl of Ecorzoriiic Policy ir7 Errglish Classical Political E ~ ~ / I ( J W I J ? (London: Macmillan and Company).

Romanu. K. (1971). .‘W, F. Lloyd - A Conimcnt”, Oxlord Ecoriomic Papers. n. s. . vul. 23

Romano. H. (1977). ”William Forstcr Lloyd - A Non-liicardian‘:”’. ~l i s lorvof PoliticalEcorzoniy. vol. 9 .

Sclignian. E. K. A. (1903). “On Some Neglccted British Economists”. Ecoriorrric /our/ial. vol. 13